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Middlesex Water (MSEX) to Invest $11.1M in Main Upgrades

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Middlesex Water Company (MSEX - Free Report) will invest $11.1 million to upgrade and maintain its drinking water infrastructure in the Borough of Carteret, NJ and a part of the community of Port Reading in Woodbridge, NJ.

Middlesex Water intends to replace 26,000 linear feet of water main as well as service lines, valves and fire hydrants through its annual initiative, RENEW, Middlesex. These essential repairs and upgrades will increase the resilience of the system and allow the company to efficiently serve its customers.

The Water Industry Needs Investment

A substantial portion of the United States’ water and wastewater infrastructure has aged and is nearing the end of its effective service life. Miles of aging pipelines require repairs and upgrades to provide and maintain quality water service. A delay in repairs could cause frequent disruptions in the 24x7 supply of potable water and sewer services, thus leading to the waste of millions of gallons of potable water every day.

Per the U.S. Environmental Protection Agency, investments of $473 billion and $271 billion are necessary to maintain and expand drinking water and wastewater pipelines, respectively, to meet demand over the next 20 years. Water infrastructures, like storage tanks and purifying units, need maintenance at proper intervals.

Utilities Making Systematic Investments

Middlesex Water, like other water utilities, has been making investments to upgrade and maintain its infrastructure. Middlesex Water plans to invest $266 million during 2023-2025 to strengthen its water and wastewater infrastructure and provide services in a safe, reliable and efficient manner.

Other water utilities like American Water Works (AWK - Free Report) , Essential Utilities (WTRG - Free Report) and California Water Service Group (CWT - Free Report) have well-chalked-out capital investment plans to strengthen infrastructure.

American Water Works aims to invest in the range of $14-$15 billion in the 2023-2027 period and $30-$34 billion for the next 10 years, 2023-2032. The Zacks Consensus Estimate for AWK’s 2023 earnings indicates year-over-year growth of 5.8%. The company’s long-term (three- to five-year) earnings growth is currently pegged at 8.1% and its current dividend yield is 1.8%.

Essential Utilities plans to invest $1.1 billion in 2023 and $3.3 billion through 2025 to improve the water and natural gas systems and better serve customers through the use of improved information technology. The Zacks Consensus Estimate for WTRG’s 2023 earnings indicates year-over-year growth of 5.6%. The company’s long-term earnings growth is currently pegged at 6% and its current dividend yield is 2.6%.

California Water Service plans to invest more than $1 billion in capital expenditures through 2024. The Zacks Consensus Estimate for CWT’s 2023 earnings indicates year-over-year growth of 7.3%. The current dividend yield of California Water Service is 1.7%.

Price Performance

Shares of MSEX have gained 3.2% in the past month compared with the industry’s 6.3% growth.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

Middlesex Water currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

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